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Financial Inclusion in India: A case-study of West Bengal

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  • Chattopadhyay, Sadhan Kumar

Abstract

The study observes that although there has been an improvement in outreach activity in the banking sector, the achievement in respect of financial inclusion is not significant in West Bengal. An index of financial inclusion (IFI) has been developed in the study using data on three dimensions of financial inclusion. It is revealed from the index that Kolkata district leads with the highest value of IFI, while rest of the districts show a very low level of financial inclusion. This implies that the State has to go a long way in achieving financial inclusion. Apart from this computation, a survey has also been conducted in the state in order to gauge the financial inclusion in rural Bengal and the results reveal that around 38 per cent of the respondents do not have sufficient income to open a savings account in the bank. It is also revealed that moneylenders are still a dominant source of rural finance despite wide presence of banks in rural areas. It is also observed that although various measures have been undertaken for financial inclusion in the State, the success is not found to be significant. However, only supply side factor is not responsible for the financial exclusion. Demand side factors are also equally responsible for this exclusion. Thus there is a need to solve both these problems with the help of appropriate policies. A whole-hearted effort is called for from all the corners of the society, viz., bankers, beneficiaries and regulators in order to make financial inclusion more meaningful and effective.

Suggested Citation

  • Chattopadhyay, Sadhan Kumar, 2011. "Financial Inclusion in India: A case-study of West Bengal," MPRA Paper 34269, University Library of Munich, Germany, revised 2011.
  • Handle: RePEc:pra:mprapa:34269
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    File URL: https://mpra.ub.uni-muenchen.de/34269/1/MPRA_paper_34269.pdf
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    References listed on IDEAS

    as
    1. Beck, Thorsten & de la Torre, Augusto, 2006. "The basic analytics of access to financial services," Policy Research Working Paper Series 4026, The World Bank.
    2. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    3. Alexander Conrad & Doris Neuberger & Maria Schneider-Reißig, 2009. "Geographic and Demographic Bank Outreach: Evidence from Germany’s Three-Pillar Banking System," Credit and Capital Markets, Credit and Capital Markets, vol. 42(3), pages 377-411.
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    Cited by:

    1. Zarina Abd Rahman, 2015. "Financial inclusion in Malaysia: tracking progress using index," IFC Bulletins chapters,in: Bank for International Settlements (ed.), Proceedings of the Workshop on "Financial Inclusion Indicators", co-hosted by the Bank Negara Malaysia, Sasana Kijang, Kuala Lumpur, 5-6 November 2012, volume 38 Bank for International Settlements.
    2. Irving Fisher Committee, 2015. "Proceedings of the Workshop on "Financial Inclusion Indicators", co-hosted by the Bank Negara Malaysia, Sasana Kijang, Kuala Lumpur, 5-6 November 2012," IFC Bulletins, Bank for International Settlements, number 38.

    More about this item

    Keywords

    index of financial inclusion; money-lenders; dimensions;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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